Digital Payment Could Compromise Fleet Security

While digital payment software continues to grow more robust, and mobile wallets are now a trend among millions, we are starting to see what might be the beginning of the end of the physical credit card. The cards may be disappearing, but their functionality is not. Just this May, Recode reported the soaring, surprising use of the Starbucks mobile payment app surpassing that of Apple and Google. That is just one retailer and the field is sure to grow among all sectors, including the trucking industry. Fleet mobile and payment software are quickly catching up with some of the most advanced industries in the world.

By the end of this year, a quarter of U.S. smartphone users — 55 million people — over the age of 14 will make an in-store mobile payment. More than 40 percent of those people will have done so through Starbucks’ mobile payments app, according to new data from research firm eMarketer

Mobile and payment advancements are inspiring growth for many companies, but the technology also poses some big threats, especially to fleet security. The trucking industry is open to all varieties of vulnerabilities even beyond the digital arena. Fleet security has been a focus since the development of logistics and the process of payment in a world where transparency has been difficult to manage. From load scams to digital breaches, fleet security takes an around-the-clock effort.

5 Old School Fleet Fraud Schemes

Although today’s fraudulent activity is generally directed at credit card, digital payment, and fleet software breaches, some “old school” schemes are still disrupting the industry. However, with the right precautions in place and enough awareness of the possibilities, these fraudulent plots can be stopped before they start. Payment leader EFS/WEX has spent years developing security strategies for fleet payment software, but is also mindful of ways a fleet can be compromised outside of fleet software. Here are the top five schemes that have been impacting the trucking and transportation industry for years.

1. The Phony Repair Shop. In this fraud scenario, someone poses as a repair shop employee performing service on your vehicle. The fraudster will provide a vehicle number, license plate number, and a driver’s name and demand immediate payment via MoneyCode or threaten to keep the vehicle. EFS has even seen cases where the fraudster generates a phony invoice and emails it to the victim.

2. The Fake Tow. As in the repair shop scam, many fraudsters will demand payment for a tow that never occurred and will demand immediate payment, threatening not to release the vehicle to the driver or repair shop.

3. The Driver in Need. Some fraudsters target companies with a large driver pool by posing as an actual driver, using information they have likely overheard by loitering around truck stops and often engaging the actual driver in conversation. The fraudster will call the dispatcher to request a MoneyCode for a fuel or repair advance using the information they have gleaned from the legitimate driver to obtain a MoneyCode.

4. The DOT Inspector/Police. These perpetrators pretend to be with the Department of Transportation or a police officer on-site during a DOT inspection and demand an immediate payment for a fictitious violation via MoneyCode in return for release of the truck.

5. The Load Scam. More organized/professional fraudsters prey on brokerages that have postings on load boards out in the field. Fraudsters will steal the identity of a legitimate trucking company and use that information to falsely book loads and coerce MoneyCode advances under false pretenses. The fraudsters will typically hold the load hostage or dump it off at a remote location so as to collect a MoneyCode as “ransom.”

To prevent fleet fraud as described above, these guidelines can help:

• Drivers should always be aware of their surroundings and avoid divulging any information to third parties that could be utilized to validate a MoneyCode.
• Validate the incoming phone number/caller information against a public listing or what’s on file in that particular driver’s profile.
• Validate the incoming phone number for the area code in comparison to the truck’s GPS coordinates or the driver’s current trip route.
• Request validation of other information not clearly visible on the truck, such as the DOT number, employee ID, and/or driver name.
• EFS customers who are brokers should keep a close eye on address and phone number changes for companies they have on file or new companies requesting to work with them, as these are often the scenarios that slip under the radar.
• Always request a printed invoice with a detailed listing of the services provided or to be provided on the service provider’s letterhead with a valid address and phone number. A legitimate business will be able to do this. ALWAYS validate the business name, address, and phone number online or through a valid directory AND contact the driver to have the driver validate the information as well.
• If possible, instruct the driver to obtain the MoneyCode and pay the third party independently. It is never advisable to issue a MoneyCode directly to a third party. Make sure the driver is instructed to obtain a receipt with a detailed listing of the services obtained on the service provider’s letterhead with a valid address and phone number.
• Most importantly – Always speak with the driver whose vehicle is involved before issuing the funds. NEVER accept a “handover” or “warm transfer” to the driver. Call the driver directly and separately on the number you have on file for the driver and apart from the service provider or caller requesting the MoneyCode.
• One of the primary tactics that fraudsters utilize is the “pressure” tactic. They demand payment IMMEDIATELY or else will not release the truck or driver. Whenever the caller is in a rush or tries to pressure you for payment, ALWAYS be suspicious. Few situations are so urgent that you won’t have time to properly verify the party requesting payment or the services that they are to provide online and with the driver.
• Consider providing the MoneyCode directly to the mobile communications device of the driver.

So while you can take steps to prevent fraudulent schemes like the ones outlined above, even more complex solutions are necessary for managing fleet fraud in digital payment. At the beginning of June, global IT and business consultancy CGI announced a collaboration with invoice payments expert FinTech Ordo to develop a service that combats fraud for payers and payees. The effort is focused on providing transparency throughout the invoice payment process by developing efficiencies of invoice payment for both the payer and the payee.

The process enables billers to receive funds in real time after submitting an electronic invoice. The platform also allows for partial or deferred payment, which prevents late payments as they exist currently. The firms also noted that a key component of the collaboration is a focus on fraud and data security. Specifically, the firm’s platform includes an integrated end-to end encryption when sending or receiving in order to mitigate fraud.

“CGI is excited to be working with Ordo to change the face of payments for businesses and consumers. The removal of friction in the billing process will not only allow billers to accrue financial savings but will also allow for greater cash flow visibility and control for customers, all in a more secure environment.”

— Neil Sadler, CGI U.K. financial services senior vice president

Platforms like these are becoming critical for every industry and particularly for the trucking and transportation industry, where payments are being executed 24 hours a day in an abundance of locations across the world. Transparency and control are vital aspects of any strategy to tighten fleet security and combat fleet fraud.

Partnering with Experts Prevents Fleet Fraud

The trucking industry has realized that partnering with experts in payment can help in fleet fraud prevention while enabling sustainable payment practices and even strategies for growth. Payment leader EFS/WEX has developed payment solutions that are customized to trucking industry needs. 

EFS/WEX Electronic Fleet Payments solutions help to optimize and simplify the financial supply chain—delivering a seamless customized approach to the procure-to-pay process. Regardless of the size or complexity of the business, the solutions can:

• Reduce the number of manual processes, enhancing control over and visibility of supplier payments
• Replace paper-based payments and remittances with seamless electronic transactions
• Increase customization and control to better manage the timing, recipient, and amount of each payment
• Improve margins
• Enhance data capture to reduce the burden of manual reconciliation
• Support core business strategies with industry expertise and knowledge of best practices

VCNs and Other Virtual Payments Help Protect Against Fleet Fraud

Virtual card transactions are run through the same networks as traditional credit cards, yet they have a one-time-use secure 16-digit card number that comes with built-in controls on the administrative end. And since no banking information has to be exchanged, valuable data isn’t exposed to fraudsters—or anyone, for that matter—for unauthorized use. In addition to each transaction being given its own VCN, this payment method allows transactions to flow through a streamlined, automated paperless process requiring minimal or no manual touch points. VCN payments provide built-in measures of payment security, as they:

• Contain the same info as plastic cards: the standard 16-digit card number, an expiration date, and a CVV number
• Don’t rely on a physical card that can get lost, stolen, or copied
• Work within precise transaction controls set by the travel company, including specific dollar amounts, timeframes, and merchant or supplier categories
• Sent through the same trusted network as all major credit card transactions

As mentioned, no banking information needs to be exchanged and/or maintained between the buyer and supplier, reducing the risk of a data compromise.

WEX also offers virtual payment solutions for the trucking industry. WEX virtual payments simplify your supplier payment process. Automation reduces the accounts payable (AP) workload and boosts productivity and savings. Virtual payments offer more security, control, flexibility, and data visibility than check and other payment types.

Benefits include the ability to:

• Pay suppliers more safely and efficiently using the Mastercard® and Visa® payment networks
• Access flexible issuing options: Choose single-use or recurring virtual payments
• Easily reconcile payments and access real-time transaction information and reporting

It might seem easy to become overwhelmed by the risks that digital payment solutions can suggest but it is comforting to know that digital is becoming the safest way to pay, not to mention the only way to deliver the capacity to actually strengthen fleet security and mitigate fleet fraud, all while promoting business growth.

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